The S&P/TSX Composite Index managed to hold on to its earlier gains during the April 22–26 trading week, edging up 155 points to 12,220.20. The index fell after the U.S. government reported slower than expected growth in the country’s gross domestic product on April 26, which increased at an annualized rate of 2.5% in the first quarter, below the 3% prediction. Both gold and base metals miners ended the week higher, with the S&P/TSX Global Gold Index adding nearly 6 points to 197.60 and the S&P/TSX Capped Diversified Metals and Mining Index rising 31 points to 785.15. The price of gold recovered U$56.40 per oz. to end at US$1,462.90.
Eastern Platinum was the most actively traded stock, with 114.2 million shares changing hands after it suspended funding to further develop its sole producing asset, the Crocodile River platinum mine in South Africa, citing weak platinum group metals prices and a difficult operating environment. Raymond James analyst Alex Terentiew says he suspects Eastern may close the underground mine, while continuing some operations such as milling tailings. He trimmed his target price by 33% to 20¢. Eastern lost 3¢ to end at 8¢.
Barrick Gold also saw heavy trading with 26.7 million shares traded, after it reported first-quarter earnings and adjusted net earnings of US85¢ and US92¢ per share, respectively, compared to the net earnings and adjusted net earnings of US$1.04 and US$1.10 per share a year ago.
The miner attributed the lower earnings to dipping realized gold and copper prices, reduced sales volumes and escalating costs. Barrick churned out 1.8 million oz. gold at all-in costs of US$919 per oz. during the quarter. It kept its full-year guidance of 7–7.4 million oz. gold, but decreased the all-in costs to US$950–US$1,050, down US$50 per oz. from the previous estimate.
Despite a “decent” quarter, Haywood Securities’ Kerry Smith cut his target price by $9 to $34.50, but reiterated a “buy” on the stock. He explained the developments at the Pascua-Lama project straddling the border of Argentina and Chile — with construction halted on the Chilean side — and the Pueblo Viejo mine in the Dominican Republic — where the local government is eyeing a larger share in the mine’s profits — “will continue to overshadow the company.” Barrick slipped 16¢ to $18.81.
But, better-than-expected first-quarter results helped lift Potash Corporation of Saskatchewan up $2.04 to $41.40, making it one of the week’s top value gainers. The Saskatoon-based miner reported a quarterly profit of $556 million, or 63¢ per share, ahead of the Street’s 59¢ estimate, and BMO’s 57¢. This was the company’s first earnings beat after six straight misses, notes a BMO analyst.
Rockex Mining was one of the week’s percentage winners, adding 50% to end at 8¢ after closing the second half of its previously announced non-brokered private placement. It raised total gross proceeds of about $394,000 for general purposes.